China, ASEAN should work together for peace in South China Sea: Premier Li

BANDAR SERI BEGAWAN— Outlining a seven-point proposal to promote “wide-ranging, deep and high-level” cooperation over the next decade between China and South-east Asia, Premier Li Keqiang yesterday affirmed that China and ASEAN should work together to make the South China Sea — where his country is embroiled in territorial disputes — “a sea of peace, friendship and cooperation”.

In his first visit to the region since becoming Premier in March, Mr Li said China will continue to consult with ASEAN countries on formulating the code of conduct for the South China Sea, which is the subject of territorial claims by several countries including China, the Philippines and Vietnam. Official consultations by China and ASEAN on the code of conduct began last month.

Mr Li’s remarks reflected a softer tone China has adopted after disputes over waters rich in oil, gas and fish raised tensions in the region.

The issue must not affect overall relations between China and ASEAN, said Mr Li at the 16th ASEAN-China Summit in Brunei. “A peaceful South China Sea is a blessing for all, while a turbulent one benefits no one,” he said.

He added that China stands ready to work with countries in the region to uphold freedom and safety of navigation there.

“We should plant more flowers, not thorns, in our relations and always be good neighbours, good friends and good partners,” said Mr Li, who pushed for active discussions on a China-ASEAN treaty on “good neighbourliness, friendship and cooperation” — raised at the Special China-ASEAN Foreign Ministers’ Meeting in August — as part of China’s proposal for greater cooperation with ASEAN. He also suggested starting negotiations to upgrade the China-ASEAN Free Trade Area (CAFTA) and the setting up of an Asian infrastructure investment bank.

An upgraded CAFTA would seek to nearly triple two-way trade to US$1 trillion (S$1.2 trillion) by 2020, from over US$300 billion last year. Negotiations will be launched this year and could complete by 2015, said Mr Li, who pledged that China would take more steps to open up trade in goods, services and investment cooperation.

The proposed Asian infrastructure investment bank will give priority to transport, energy, communication and other infrastructure projects and Mr Li welcomed ASEAN members to play “an active part in it”. China and ASEAN should also use existing mechanisms to better plan, identify and launch landmark projects to build connectivity.

The proposals on the trade treaty upgrade and the infrastructure investment bank were welcomed by Singapore Prime Minister Lee Hsien Loong.

In his speech at the ASEAN-China Summit, Mr Lee said Asia’s infrastructural needs over the next decade and beyond is “enormous”. Organisations such as the World Bank, Asian Development Bank and the new ASEAN Infrastructure Fund are working well with Asian countries to meet these needs, but more can be done, and the proposed Asian infrastructure investment bank will complement them.

Looking forward to studying its details with fellow ASEAN members, Mr Lee said it would be ideal for the proposed bank to have inclusive membership for both ASEAN and non-ASEAN countries. The “right profile of members and major investors” will ensure a strong credit rating for a new institution and inclusive membership encourages participation of private sector funds subsequently.

But stability is needed for China — ASEAN’s biggest trading partner — and the region to prosper. This requires peaceful and well-considered management of difficult issues such as that of the South China Sea, he said.

In his speech earlier yesterday at the ASEAN Summit meeting, Mr Lee called for formal negotiations on the code of conduct to begin soon.